Writing a Business Plan for Success
Our business is to assist others every day to start their businesses, whether they are incorporated or registering a new business in Canada.
We are often asked about information related to a business plan, and we felt it was important to provide to you as much information and tools available to start a successful business plan and give you and your business the best opportunities available. If you complete a business plan, your business is 20% more likely to be successful.
Canada business opportunities exist every day with an expanding market both at home and abroad.
What are the 3 main purposes of a business plan?
- To give your business the best opportunity for success
- To gain insight into your business, industry and potential clients
- To focus on goals and objectives of your new business
Writing your Business Plan as a new entrepreneur is one of the best planning tools available for you as you start your business. The plan gives you the structure to really take a dive into your business platform, competitors, goals and ambitions. Planning for the future of your business is just like planning for anything else in life. If you were looking at purchasing a new vehicle, most likely you would take time researching different makes and models, the price, what the vehicle has over its competitors, dealership reviews, car reviews and whether the vehicle does well in accident testing.
When you do your research, you are more confident moving forward no matter what in life you are doing and starting a business is no exception.
There is an old saying “A goal without a plan is just a wish” – Antoine de Saint-Exupéry.
A business plan, when created well provides both opportunities and threats to your business. It takes you from the business concept, money and finance, operation and marketing plans, and setting goals on how you will move forward to build a very successful business.
Let’s start writing and see if you feel more focused and confident moving forward at the end of this exercise than you do at the beginning.
A business plan begins with a brilliant idea and moves it forward to a tangible, relatable and focused perspective.
Executive Summary or Business Concept
This is an overall statement about your business idea and detailing a company overview. It should include basic information that includes the main objectives of your business and how you plan on executing this plan.
It should also include ownership structure. This item refers to establishing your business as either a registered or incorporated business.
We have written a blog on the difference between registering and incorporating a business. https://www.ontariobusinesscentral.ca/blog/master-business-licence-vs-incorporating/
Determine how many employees or contractors are required at minimum to get the business operational, what product or service you wish to do, who you believe is your target demographic (people you will sell to) and what you believe will give you an advantage over competitors. This is a general concept to move forward on. The specifics about each will move to a more specific and targeted focus as you go through building your plan.
Products and Services
Expand upon your products and services. This may include items that separate you from the competitors whether you offer more, better, faster or more reliant. Provide a detailed description of your product or service and what is innovative or separates your products from others within the marketplace. List as many unique points to your service or product and how effective these will be with consumers. This will assist you not only in having a tremendous understanding of what you are selling but it will also give you ideas of how to market your business and what separates you from your competitors.
This part is to really focus on prospects of your business within the community you intend to service along with the overall growth of your industry. You want to be in an industry which has growth potential and a customer base that is strong and increasing.
These are 2 key components giving you the opportunity to succeed.
Determine who your demographic market is including male or female, age group, hobbies, academics, income, anything that would provide you the highest level of understanding of who your clients will be so you can target your advertising and marketing to them effectively and concisely.
This is where you get into the core of your business opportunities and the more research you do, the better analysis and bigger results you will have.
Make a list of your competitors, pricing, slogans, branding, promotions. List the strengths and weaknesses of each competitor. This will provide insight into what appears to be working and not working with your competitors and may give you an opening or opportunity to provide a product or service in a more effective way. You want a competitive advantage to gain potential clients and part of this is gained by completing comprehensive market research.
Connect with individuals or surrounding businesses that would have some vital information to your competitors. Look at their online presence and customers reviews, what they offer, how effective its been and especially what may be missing.
Determine the most effective opportunities to reach your targeted market, whether banner ads, flyers, social media, trade shows, networking, print media or online advertising.
Many businesses have cyclical timeframes where within a year, there are most productive months and months where your business is not on the mind of consumers.
Target your most effective times of the year to promote your business and put forth your advertising dollars when your business is most likely to be needed. Target the demographics at the key times of the year, month or day to gain the optimum results and benefits to your business.
How much are you and the people you need going to cost the business?
This is the most critical part of the planning and the area where most entrepreneurs fall short, so ensure this doesn’t happen to you. It is important to personally have a set aside amount of cash on hand to carry you and your employees or contractors for a six month period. This allows the opportunity for you to continue to pay your monthly expenses and provide the income necessary to others as you start your business. Where you can cut personal expenses, do it. This may include simple items like not stopping for an expensive coffee in the morning to reducing/removing your monthly want items and only focusing on the needs items.
What do you need to start and run your business?
Make a list of what items you need to acquire to start your business such as computers, software, desks, vehicles, equipment, inventory. If you can, purchase items second hand as there are all kinds of opportunities to buy used equipment from businesses that have either closed down or moved to a new line of furniture, etc.
If you need to lease space to operate your business, the location costs can really differ depending on where you set up shop. How important is it for your business to be within a certain geography? How much space do you need? How long are you going to lease the space for? Typically, the minimum lease agreement is for a two year period.
Ensure you have the revenues to factor this cost into your overhead expenses for at least 6 months. Alternatively, there are many less expensive shared space options available in any urban area. This may be suitable to you when you are just starting out and it offers the availability to take a shorter lease and usually offers conveniences such as on site kitchens, conference rooms and bathrooms.
Determine how much you will need to advertise your business. Things like Adwords with Google is effective but is a costly platform to establish an online presence, however, if your advertising campaigns are set up properly, you should start seeing orders and revenues as soon as you begin advertising. A less expensive set up is to establish a business Facebook account. Ask everyone you know to like and share your business and start advertising your business. You can either pay Facebook to advertise your business or you can post sales driven promotions yourself with your Facebook account. You will want a minimum of 3 months set aside for advertising and ensure your budget includes both the duration and costs of advertising.
Looking for investors?
If you want to seek potential investors for your business, the requirements you are required to provide take on a much more comprehensive listing of finances. Most likely, you will be required to provide a three year projection on sales forecasts along with income statements, balance sheets, monthly cash flow and sources of funding along with projections. You may be required to provide your personal financial picture as well.
This is when you are planning on making a pitch to investors for venture capital or business loans. Typically, the presentation is completed in person with a business strategy to gain optimism and financial support from lenders. Present an overview of your business plan using PowerPoint, Keynote or Prezi for a visual aspect to your presentation.
You are starting to see a more clear picture of your business and its direction. Now, you need to think about how the business will operate. You want to set up a seamless experience for your clients to use your service or product. For contact to be simple, follow through flawless and execution between your business and your customers with a standard of excellence. This may include items such as cellphones, software, website interface, a tracking system, shipping accounts, telephone systems and a variety of other items. From the moment your client first makes contact, you want to have in place a standard protocol of how clients will be directed through the transaction of doing business with you.
Risk and Mitigation Planning
This is where you consider the what if’s of executing your business plan and how you are prepared for any unexpected events. This is anything from weather, issues with employees, unexpected higher costs of products, delays in shipping, defective products, technical issues, etc.
This may be thought of as plan b to your original plan of operating your business. Just as in life, things in business can go wrong. With thinking and planning ahead, you can avoid the last minute calculations of how to manage things when something does go wrong, and you know it will.
Make a list of the things you can see as potential problems for your business and make a plan b to each item to rectify the situation. This prepares you in advance in your mind as what the most effective alternative is to support any disruption.
Opportunities for Growth
It’s important to think about your business in the future and what opportunities may lie ahead once you build up your core business and revenues. These may be anctionary business ideas or expansions into a new segment of the business and the opportunities that may be available with your expanding customer base as a resource to easily and inexpensively bringing in new and lucrative revenues.
Tasks and Deadlines – Setting Goals
It’s important to strive as you start and grow your business to set goals including the direction, sales and progress of your business and overall financial forecasts for your business. This keeps your focus and maintains accountability from yourself and any team who works for and with you. The tasks and goals should be set up on a monthly basis, where you set your targets and try to achieve them. You may exceed your expectations or come in below what you targets are. The importance is that you have a plan on what you want to achieve. This puts a baseline in front of your eyes and mind as to where you are right now as of today and where you want to be in a month from now or six months from now. As you come to each timeframe, sit down and analyse your accomplishments and where your expectations weren’t met and determine your next step in moving forward to increase the gains and determine a new or updated strategy for the losses. By doing this as a regular part of your business practice, you will see continual growth as you are putting actions behind your targets.
All the information related in this blog has been about planning and executing a business plan. At the same time, it’s important to keep in mind an exit strategy for your business. Remember that your business will have value over time and will be worth something for you to pass on to others and gain the financial reward of your hard work and determination. When your business is successful, and you have cultivated a great brand, there are a number of options available to you whether you want to have someone operate the business on your behalf where you can continue to take income from the business and move on to a different business or lifestyle or if you want to sell your business, keeping the end goal of having your business increase your overall personal wealth should be reviewed. When your business is three to five years in, it’s time to really take a look at what your business is worth, are you able to take time away from it and it may be time to take the experience you’ve gained and to start a new business and move forward with a new venture.
How do you write a 5 year business plan?
You don’t, thats too far into the future and so many factors can change between now and five years out. Even if you only consider the advancement in technology alone, the time frame is too far reaching. You are better to keep your business plan for today and the near future. A six month window with updates at the end of each month will assist you to stay much more focused and engaged, whether your selling a product or service.
Over time, it’s important to update your business plan especially when you have some numbers for the business to offer guidance, such as the profit and loss of the business.
As a business owner, it’s important for you to do a comparison every month on marketing and sales. This will also assist you to see what is and what is not working with the opportunities to gain additional traction in the marketplace with what is working and narrowing or removing the items which aren’t.
Ontario Business Central is here to assist you when you are ready to start your business. Our staff have been helping new entrepreneurs to put the wheels in motion to either incorporate or register businesses since 1992.
Here is our essential guide to starting a business with the options available with us to get your business up and running.
Our business has always been about helping entrepreneurs to gain knowledge, resources and innovations to make each day of owning and operating a business better. We want you to be in the driver’s seat towards your business success.
Here are some additional references you may find useful.
To view some examples of existing business plans to guide you, The University of British Columbia has provided a number of supports from sample business plans to online business plan templates to assist you in creating your own business plan.
The Canadian government offers information related to planning a business and completing a business plan. You can view their articles:
Tim Berry who is the owner of Palo Alto and LifePlan has made his business to assist others in creating business plans for startups, strategic marketing campaigns and for investment proposals. You may find his YouTube videos helpful.
The Wharton School is an American University in Pennsylvania which was the first University in the United States that offered business school for Entrepreneurs.
Patrick FitzGerald – Wharton School is a serial entrepreneur, angel investor and Masters lecturer for entrepreneurs through the Wharton School.
Entrepreneurship Series Business Plan Writing 101
If you would like further information, please feel free to reach out to any of our staff who are always here to assist entrepreneurs to start their new businesses. Ontario Business Central has been assisting individuals wishing to establish businesses for the last 25 years. Our mandate is to help individuals who wish to become entrepreneurs and our sole mission is to provide an easy online platform to begin your dream of business ownership.
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Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.